AMD Reports Better 4Q 2012 and Annual 2012 Losses Than Expected

AMD [NASDAQ: AMD] today reported earnings for the 4Q 2012 as well as the fiscal year of 2012. They reported revenues of $1.16 billion nd a loss of $473 million, breaking down to a loss per share of $0.63. The company also reported non-GAAP losses of $102 million, or $0.14 per share instead of the expected loss of $0.20 per share. Indicating that the company may actually be moving in a different direction. A large chunk of AMD’s losses for 4Q 2012 were in fact restructuring costs and charges from the GF wafer agreement. This charge came out to $273 million in 4Q 2012 in addition to $90 million in restructuring charges. For the same period last year, however, AMD reported an adjusted EBITDA of $260 milllion compared to $30 million this quarter. For the 3Q 2012, AMD reported an adjusted EBITDA loss of $35 million, so clearly, there is some improvement quarter over quarter.

For the year, AMD reported revenues of $5.4 billion, down 17% year over year and gross margins of 23%, with a non-GAAP gross margin of 41%. They reported an operating loss of $1.18 billion, translating to a loss per share of $1.60, re-sparking concerns about AMD’s ability to actually make money and generate cash since their acquisition of ATITechnologies back in 2006. This year’s losses effectively erase the profits that AMD reported in the past 3 years of $491 million (2011), $471 million (2010) and $376 million (2009). Prior to that, AMD reported losses of $2.445 billion in 2008 and $2.843 billion in 2007.

2012 was not kind to AMD, but we can clearly see that AMD has been making significant changes in their personnel. So much so, that many of the people we now work with inside of AMD have been there for about a year or less. As such, we believe that 2013 will likely start to see the fruits of those new employees efforts and that AMD needs time to properly execute their new strategy. We have already seen some interesting new products out of AMD at CES this year and are interested to see how they will proceed forward from here on out.